Intel Corp.’s announcement
of a new $3.5 billion venture alliance to invest in U.S. start-ups
puts a nice face on the chip giant and the venture industry. It
conjures up an impressive vision of an industry coming together and
committing to a major new initiative.
Except for one thing – it’s not new money. The 24 venture firms that have signed on have not raised new capital, and they’re not pooling their capital into a new fund. While $3.5 billion is a nice big, round number, it simply represents the total amount that this small but prominent slice of the venture industry already planned to invest in U.S. companies.
In fact, there’s nothing forcing the venture firms to invest that amount during this two-year period. They’re simply giving their word.
Intel itself says it’s committed to investing $200 million in U.S. companies over the next two years – not an insignificant amount. But it likely would have invested that total without this announcement. Last year Intel invested $327 million through its Intel Capital venture arm, about half of which went to North American companies.
To read the full, original article click on this link: Through Intel, Venture Firms Send Message To Washington - Venture Capital Dispatch - WSJ
Author: Tomio Geron
